In the present paper, the continuous-drive friction welding (CDFW) technology has been successfully applied to join the U75V rail steel. The base metal (BM) of U75V rail steel is lamellar pearlite, and the weld zone could be clearly divided into three subzones (i.e., heat affected zone, thermo-mechanical affected zone (TMAZ), and central weld zone (CWZ)). Electron back-scattered diffraction examinations revealed the martensitic evolution in TMAZ and CWZ, suggesting that the experienced high temperature, severe plastic deformation, and fast cooling rate induce the microstructure transition during the CDFW process. The hard and brittle martensite structure explains the raised microhardness profiles and the reduced impact absorption energy of the as-welded joints. The CDFW process parameters govern the joint properties via influencing the welding heat input and plastic deformation by spindle speed and friction pressure at the friction stage, and the plastic deformation layer (flash) extrusion by upsetting pressure at the upsetting stage. More favorable results could be obtained at small set values of spindle speed (1800 rpm) and friction pressure (75 MPa) with less heat input and plastic deformation, and a large set value of upsetting pressure (175 MPa) with more flash extrusion, whose tensile strength reached 94.3% of that of the BM.